Fab’s Newest Distribution Channel: LivingSocial

Designer e-commerce company Fab today is beginning to sell “gifts” through LivingSocial’s website and marketing channels.

Fab will feature 50 of its “top picks” from its Holiday Shops in LivingSocial’s gift guide. LivingSocial, with 24 million U.S. members by email and on the site, promotes the gifts through its channels.

Jake Maas, senior vice president of consumer businesses at LivingSocial, says the deal will help the company transition from being a provider of local daily deals to a place where people can discover all kinds of unique products.

“We’ve never considered ourselves a daily deal company, we’ve viewed our platform as being broader than that,” he said. “Our focus has been around local commerce and discovery, and that’s where we differentiate ourselves.”

Here’s how the whole process basically works: LivingSocial hosts the gifts on its website and promotes them through its subscription emails, and handles all the transactions. Fab handles the fulfillment through its warehouses and delivery channels. That’s one thing that separates Fab from other flash-sales sites, which typically wait until a customer has purchased a good before booking a purchase and shipping it to a fulfillment center.

LivingSocial is adding 50 gifts a week later from Fab, for a total of 100. The plan is to do even more before year end. Maas said LivingSocial was focused on gifting in the mean time, but “certainly the parameters is something that we’re both interesting in exploring.”

The deal basically started when LivingSocial went to Fab and said, “We loved your curation, we loved your point of view,” says Fab CEO Jason Goldberg. “They thought it was a good brand fit for them and we thought it was a good brand fit as well,” he said.

Mr. Goldberg said the deal will be profitable for Fab. He said the exact terms of the deal are confidential but noted Fab will retain the product revenue from the sales while LivingSocial collects a marketing fee for distributing Fab’s products.

This is the second distribution deal Fab has done to expand its reach, starting first with Facebook. “It’s an opportunity for us to get the Fab brand and products out in front of another large user base,” Mr. Goldberg says. “Whether it’s LivingSocial or Facebook, it’s less about selling a specific product and more about how do we get introduced to customers we might not be reaching otherwise.”